Federal Budget's Tobacco Tax Increase Fails to Address Root of National Contraband Tobacco Problem

OTTAWA, Feb. 12, 2014 /CNW/ - The National Coalition Against Contraband Tobacco (NCACT) is disappointed that the 2014 Federal budget increased the lucrative nature of contraband tobacco while also failing to provide meaningful measures to stop it.

"By increasing the difference in price between the legal and illegal market, the government is effectively putting money in the pockets of gangs," said Grant. "The RCMP estimates that there are about 175 criminal gangs that are involved in the contraband trade, using it as a cash cow to finance their other illegal activities, including guns, drugs and human smuggling. In fact, just yesterday 12,000 illegal cigarettes, along with drugs and cash, were seized by the Gatineau Police a short distance from Parliament."

The 2014 budget will increase the price differential between legal and illegal product. Already, contraband tobacco can cost less than the price of a movie ticket— about $70 less than legal product. Expanding this difference will effectively increase criminals' profit margins.

"Contraband tobacco is a prime source for youth smoking. Illegal cigarettes are cheap, easily accessible, and the criminals who sell them don't check for ID," said Gary Grant, a 39-year veteran of the Toronto Police Service and spokesperson for the NCACT.  "Unfortunately, this year's budget will do little to stop this. If anything, it creates conditions under which contraband tobacco can flourish. $4.03, the size of the tax increase, is actually the cost of the cheapest baggies in some smoke shacks."

The budget does allocate nearly $92 million over five years to enhance contraband tobacco enforcement, mostly focussed on high tech equipment to monitor the porous border between Quebec, Ontario and the United States. However, the budget contained no new funds to deal with the thriving domestic smuggling trades.

"While smuggling across the border is certainly an issue, Canada needs more boots on the ground to deal with the criminality within our borders. There are 50 illegal factories operating in Canada producing millions of cigarettes each year. These are increasingly finding their way into new markets, including Atlantic Canada and the prairies. New technology is only as effective as the law enforcement officials behind it," continued Grant.

The fact that the government has made buying contraband tobacco more attractive means that it is critical that it act immediately to take real police action on stopping the illegal cigarette trade.

"The government had taken a number of steps forward in dealing with contraband tobacco through measures such as the Tackling Contraband Tobacco Act," concluded Grant. "Yesterday's budget may have brought another step forward, but it also took two steps back."

ABOUT NCACT
The National Coalition Against Contraband Tobacco is a Canadian advocacy group formed by organizations and associations concerned about the growing danger of contraband cigarettes. NCACT members share the goals of working together to educate people and urge government to take quick action to stop this growing threat.

The members of the NCACT are: Association des détaillants en alimentation du Québec (ADA), Association des marchands dépanneurs et épiciers du Québec (AMDEQ), Canadian Chamber of Commerce, Canadian Convenience Stores Association (CCSA), Canadian Manufacturers and Exporters, Canadian Taxpayers Federation, Canadian Tobacco Manufacturers Council, Conseil du patronat du Québec (CPQ), Customs and Immigration Union, Échec au crime Québec, Fédération des chambres de commerce du Québec (FCCQ), Frontier Duty Free Association (FDFA), National Citizens Coalition, National Convenience Stores Distributors Association (NACDA), Ontario Chamber of Commerce, Retail Council of Canada and Toronto Crime Stoppers.

SOURCE: National Coalition Against Contraband Tobacco (NCACT)

For further information:

Michael Powell
(p) 1-866-950-5551
(m) 613-797-7313
(e) [email protected]